''Soden v British and Commonwealth Holdings plc''

998 Year 998 ( CMXCVIII) was a common year starting on Saturday (link will display the full calendar) of the Julian calendar. Events By place Europe * Spring – Otto III retakes Rome and restores power in the papal city. Crescenti ...

AC 298 is a UK insolvency law case, decided in the

House of Lords The House of Lords, also known as the House of Peers, is the Bicameralism, upper house of the Parliament of the United Kingdom. Membership is by Life peer, appointment, Hereditary peer, heredity or Lords Spiritual, official function. Like the ...

. It decided that damages for negligent misrepresentation inducing purchase of company shares are not "sums due" to shareholders for the purpose of the Insolvency Act 1986, s 74(2)(f), so that a claim for such damages is not subordinated to claims from other creditors.

Facts

British and Commonwealth Holdings plc ("BCH") bought all the shares in Atlantic Computers plc ("AC") for £434m in 1988. Both went into administration. BCH brought an action against AC for negligent misrepresentation, which induced BCH to buy shares, and also against its advisors in the acquisition

Barclays de Zoete Wedd Barclays () is a British multinational universal bank, headquartered in London, England. Barclays operates as two divisions, Barclays UK and Barclays International, supported by a service company, Barclays Execution Services. Barclays traces ...

Ltd. ("BZW") started proceedings against AC for contribution. AC's administrator appealed against a Court of Appeal ruling,

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2 WLR 206,

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2 CLY 3498 arguing that neither BZW's, nor BCH's claim would be subordinated to the claims of other creditors under s 74(2)(f) IA 1986.

Judgment

The House of Lords (Lord Browne-Wilkinson, Lloyd, Steyn, Hoffmann and Hope) dismissed the appeal. Sums due to a "member of the company (in his character as a member)" within s 74(2)(f) only extended to sums recoverable in actions based on the statutory contract between the members and the company under the Companies Act 1985 s 14(1) and did not include the type of damages sought by BCH. Lord Browne-Wilkinson gave the lead judgment.

Notes

{{reflist United Kingdom insolvency case law House of Lords cases 1997 in United Kingdom case law

Facts

Judgment

See also

Notes